Winn-Dixie Louisiana and Sedgwick Claims Management VS HCA Management Services, L.P.
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2010 CA 2205 WINNDIXIE LOUISIANA AND SEDGWICK CLAIMS MANAGEMENT VERSUS HCA MANAGEMENT SERVICES L P DATE OF JUDGMENT rJUN 1 0 2011 ON APPEAL FROM THE OFFICE OF WORKERS COMPENSATION NUMBER 07 02674 DIST 6 PARISH OF ST TAMMANY STATE OF LOUISIANA HONORABLE ELIZABETH WARREN OWC JUDGE Lance S Ostendorf Counsel for PlaintiffsAppellees New Orleans Louisiana WinnDixie and Sedgwick Claims Management Franklin D Beahm A Rebecca Wilmore New Orleans Louisiana Counsel for Defendants Appellants HCA Management Services L and P Lakeview Regional Medical Center BEFORE KUHN PETTIGREW AND HIGGINBOTHAM JJ Disposition AFFIRMED Defendants appellants Lakeview Regional Medical Center Lakeview and its administrator HCA Management Services L HCA appeal the judgment of P the Office of Workers Compensation Administration OWCA awarding plaintiff appellee WinnDixie Louisiana WinnDixie reimbursement for overpayment it made to Lakeview on behalf of its injured employee We affirm FACTUAL AND PROCEDURAL BACKGROUND The parties do not dispute that WinnDixie employee Nowert Hills had a work related accident in the course and scope of his employment for which he received treatment Later Hills complained of neck pain and treated with Dr Jeffery Oppenheimer Dr Oppenheimer diagnosed Hills with spondylosis a degenerative condition of the vertebra of his neck and recommended that he undergo an interior cervical diskectomy and fusion On January 7 2005 Hills presented at Lakeview for surgery which was performed the same day After a day of observation Hills was discharged from the hospital on January 9 2005 On February 3 2005 Winn Dixie the undisputed party responsible for the costs of Hills surgery under the Louisiana Workers Compensation Act received a bill for 81 from Lakeview 33 044 WinnDixie sent a check for 4 to 00 118 Lakeview which the employer determined was the amount due for the New Orleansbased surgery under the OWCA reimbursement schedule On March 25 2005 as Lakeview administrator HCA sent a letter to WinnDixie which included s a section that was boxed off from the remainder of the letter According to the description set forth in the boxed section under state law WinnDixie owed 85 of the billed charges On April 25 2005 a WinnDixie agent paid 64 to 11 770 Lakeview for the charges incurred for Hills surgery A subsequent audit by an agent for WinnDixie revealed that Lakeview had charged 39 for the 00 049 implants that had been surgically placed into Hills WinnDixie contacted HCA and Lakeview advising that it did not believe the hospital was entitled to either 85 of the billed surgical charges or the amount billed for the implants The parties ultimately agreed that Lakeview was not entitled to the billed amount of the implants and WinnDixie was reimbursed 22 for the 82 302 overcharge But HCA and Lakeview refused to reimburse any other amount to WinnDixie A WinnDixie agent submitted a special reimbursement consideration request with OWCA On June 5 2006 an assistant secretary with the Louisiana Department of Labor OWCA DOLOWCA issued a ruling concluding that based on the documentation provided by Winn Dixie Lakeview was entitled to no additional payments in excess of the New Orleans per diem rate in conjunction with Hills surgery I After HCA and Lakeview refused to reimburse the overpayment so as to conform to the DOLOWCA ruling Winn Dixie joined by its administrator Sedgwick Claims Management filed this petition After a trial on the merits an OWCA judge determined that Lakeview had not met the criteria to charge 85 of the billed hospital charges for Hills surgery and thus WinnDixie was entitled to reimbursement in the amount of 31 This appeal by HCA and Lakeview 29 578 followed in which without challenging the quantum of the award they assert that The DOLOWCA ruling also confirmed that under Louisiana workers compensation s reimbursement schedule HCA and Lakeview were entitled to charge no more than the invoiced cost of the implants plus 20 as profit Thus reimbursement to WinnDixie for the approximately 400 markup on the implants was proper 3 OWCA erred in its construction of terms of art used in the regulations that set forth the criteria for additional compensation DISCUSSION As this court noted in Gray Ins Co v St Charles Gen Hosp 1996 1637 pp 23 696 So 577 578 La App 1st Cir 6 the Louisiana legislature 2d 97 20 has established a reimbursement schedule for medical surgical and hospital services due under our workers compensation laws La R 23 1034 S B 2 directs OWCA to adopt rules and regulations necessary to establish and implement such a schedule Fees in excess of this schedule are not recoverable against the employee employer or workers compensation insurer La R 23 S 1034 D 2 The reimbursement schedule is set forth in Title 40 of the Louisiana Administrative Code 2505 40 outliers It provides a per diem rate that varies by locality C A L It also provides for additional payments for medical cases that are e i statistical anomalies Hospitalizations for acquired immune deficiency syndrome acute myocardial infarction and severe burns are considered automatic outliers and are reimbursed at 85 of the billed hospital charges C A A 2519 L 40 Other cases after an appeal process may be reimbursed as outliers at 85 if they are atypical in nature due to case acuity causing unusually s high charges when compared to the provider usual case mix C A L B 2519 40 A case originally paid at the per diem rate may be appealed if 1 the total inpatient hospital surgical charges are greater than or equal to 100 00 000 2 the total inpatient hospital medical charges are greater than or equal to 00 000 75 or 3 the average charge per day is equal to 1 times the applicable 75 daily rate L 40 CB A 2519 1 4 If a healthcare provider believes a case fits the appealable criteria it may submit a request for review to the insurer If that request is denied the provider may file a special reimbursement consideration appeal with the OWCA L C A 2 B 2519 40 and 3 An appeal of that decision may then be filed using the same procedures established for dispute resolution of claims for workers compensation benefits La R 23 S 1034 F 2 As noted above in this case it was Winn Dixie as payor rather than Lakeview andor HCA the provider in this case that requested the review under C A 2519B L 40 And when FICA and Lakeview chose not to conform to the ruling of DOLOWCA it was employer WinnDixie that filed a petition using the same procedures established for dispute resolution of claims for workers compensation benefits We find no error in this approach At the trial before the OWCA the burden of proving outlier status so as to qualify for payments in addition to the surgical per diem the rate of 85 of the billed charges e i reimbursement at was with Lakeview and HCA as the party 2d claiming entitlement to it See Gray Ins Co 19961 637 at p 3 696 So at 579 Thus HCA and Lakeview had to show that Hills case was atypical in nature due to case acuity causing unusually high charges when compared to the s provider usual case mix Gray Ins Co 19961637 at p 3 696 So at 579 2d But L 40 does not define acuity C B A 2519 As noted by the Gray court acuity is generally defined as clarity or keenness of sense perception 1996 1637 at p 4 9 n 696 2d So at 579 9 n Recognizing the inappropriateness of that definition in the interpretation of the plain language of the regulation the Gray court concluded the drafters meant acuteness which 9 the court noted in a medical sense means having a short and relatively severe course 19961637 at p 4 10 n 696 So at 579 2d 10 n HCA and Lakeview suggest that the Gray court interpretation of case s acuity does not comport with the meaning of the term as used in the health care industry when dealing with billing issues In support of this assertion they offered testimony from Patrick Clune the chief financial officer for HCA Houston Shared Services admitted as an expert in hospital financing billing and collections In determining case acuity and case mix Clune explained that hospitals measure intensity in terms of resource consumption as well as risk He testified that in determining the case acuity for Hills surgery he examined the case mix for Lakeview in 2005 when the surgery was undertaken Based on the aggregation of all patients within the hospital setting accounting for all inpatient hospital procedures Clune determined that Lakeview case mix in 2005 was 1 And he s 31 calculated Hills case acuity at 2 3351 Clune stated that the difference between Hills case acuity and Lakeview case mix was almost double that of the general s population meaning that Hills case was much more intense requiring the consumption of more resources Thus HCA and Lakeview maintain that because the average per day charge for Hills case equates to in excess of 1 times the 75 applicable per diem rate under L 40 Lakeview is entitled to C B A 2519 c 1 outlier status Clune admitted in calculating case mix vis avis case acuity all inpatient procedures performed at the hospital were an element of the determination Therefore unlike the case in Gray where this court reversed the OWCA IN conclusion that St Charles General Hospital was entitled to outlier status because it had proven that the surgical procedure undertaken was atypical in nature to similar lumbar surgery cases performed at that hospital see 19961637 at p 3 696 2d So at 579 Clune testimony supports a finding that Hills case was atypical in s nature to all inpatient procedures conducted at Lakeview in 2005 which is a broader case mix population than that utilized in Gray Clune admitted that in using the population of all inpatient procedures in the case mix assessment everything from deliveries of babies to wart removals was included Such an approach particularly in a case like this where a broad population of procedures was utilized to determine a hospital case mix essentially permits the hospital to s establish outlier status and entitlement to 85 of the billed charges simply by consuming resources in excess of the reimbursement rate established by OWCA This is in derogation of the legislative directive that requires OWCA to establish a reimbursement schedule that includes charges limited to the mean of the usual and customary charges for such care services treatment drugs and supplies with the obvious purpose of capping the amount providers can charge employees for workrelated expenses See La R 23 Thus like the Gray S 1034 1 C 2 court we believe the test for outlier status encompasses more than whether a surgery is typical when compared not only to other surgeries involving the same area of the body but also to all other inpatient procedures performed at a hospital See 1 9961637 at p 4 696 So at 579 Accordingly we interpret due to case 2d acuity in L 40 to mean acuteness i having a short and C B A 2519 e relatively severe course 7 According to the medical records and testimony of WinnDixie agent registered nurse Bonita Saucier Hills had spondylosis a degenerative condition that had deteriorated to where he was having radicular symptoms in his arms As a degenerative condition she distinguished spondylosis from one that was acute and an emergency situation Hills operative report stated the surgery was a routine cervical procedure with no indications of any complications Nothing in the operative report suggested that Hills required acute or intensive care which resulted in additional costs for the hospital stay The hospital summary noted a routine hospital course with a discharge the second post operative day Hills was in the surgical suite approximately three hours and twentytwo minutes for a procedure that was concluded in less than two hours The anesthesia report indicated that there had been no complications and that from the anesthesia aspect the surgery had been uneventful And the hospital progress notes stated that after surgery Hills radicular pain had been eliminated and there were no indications of any problems HCA and Lakeview offered no evidence in contradiction to that established by Saucier Based on the evidence presented to OWCA we find no error in its conclusion that HCA and Lakeview are not entitled to special reimbursement consideration under L 40 having failed to establish that Hills case C B A 2519 was atypical due to case acuity since nothing supports a finding that his case was a short and relatively severe course of medical treatment 2 Accordingly OWCA We find no merit in HCA and Lakeview contention that the trial court erred in relying on the s letter issued by DOLOWCA concluding that the provider was entitled to no more than the New Orleans surgical per diem for two days See La R 23 More importantly OWCA S 1317A s conclusion that HCA and Lakeview failed their burden of proof is supported by the evidence even without consideration of the letter containing the ruling of DOLOWCA Thus there was no error 8 correctly ordered HCA and Lakeview to reimburse WinnDixie the amount in excess of the New Orleans surgical per diem for two days DECREE For these reasons the OWCA judgment is affirmed Appeal costs are assessed against defendants appellants HCA Management Services L and P Lakeview Regional Medical Center 7u10113 a1011 I I
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